(Reuters) - French President Francois Hollande said on Saturday the European Union must work with China and called for a balanced resolution to an escalating trade dispute that began with solar panels but has since spread to European wines.

Speaking at a conference with Japanese business representatives in Tokyo, Hollande said France's goal was to sell more products to the Chinese but that there needed to be clear ground rules and more cooperation between both sides.

"We need to work with China... to develop our economies but also to define rules, principles and to open new areas of cooperation," Hollande said.

"We need to resolve our trade problems with China through discussion, without advantages being given to one country over another."

The Chinese authorities this week launched an anti-dumping inquiry into European wine sales, seen as a retaliatory move after the EU moved to impose duties on Chinese solar panels.

The move sparked outrage in France, which in 2012 accounted for more than half of the total annual $1 billion (642 million pounds) volume of EU wine exported to China, excluding Hong Kong.